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Form To The Prepare Payroll Function. These Documents Identify

The document describes the payroll procedures for a company. It involves personnel submitting timesheets and pay rate changes. Production employees submit job tickets and time cards. Payroll prepares paychecks based on this information and distributes them, while also updating accounting records. The process ensures payroll accuracy and security through separated roles and specialized controls for payroll activities.

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Alyn Sim
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48 views2 pages

Form To The Prepare Payroll Function. These Documents Identify

The document describes the payroll procedures for a company. It involves personnel submitting timesheets and pay rate changes. Production employees submit job tickets and time cards. Payroll prepares paychecks based on this information and distributes them, while also updating accounting records. The process ensures payroll accuracy and security through separated roles and specialized controls for payroll activities.

Uploaded by

Alyn Sim
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Payroll system

- Is actually a special-case purchases system


- In which the organization purchases labor rather than raw materials/ finished goods for
resale

So why is there a need for specialized procedures?


o Payroll procedures differ greatly among classes of employees
o Payroll activities are discrete events in which disbursements to employees occur
weekly, biweekly, or monthly.
o Writing checks to employees require special controls

We have here a data flow diagram of payroll procedures


1. Personnel Department
 The personnel department prepares and submits the personnel action
form to the prepare payroll function. These documents identify
employees authorized to receive a paycheck and are used to reflect
changes in hourly pay rates, payroll deductions and job classification.

2. Production Department
 Production employees prepare 2 types of time records:
Job tickets – records the time spent by individual workers on each
production job. Which is used by the cost accounting department to
allocate direct labor charges to Work in Process
Time cards – it is used to record hours worked by an employee during
one work week. This is the one inserted into a time clock. This is sent
to the payroll function so they can calculate the amount of the employee’s
paycheck.

3. Update the Work in Process Account


 After cost accounting allocates labor costs to the WIP account, the
charges are summarized in a labor distribution summary and
forwarded to the general ledger function.

4. Prepare Payroll
 After receiving the pay rate and other data from the personnel
department, a clerk in the payroll department then performs the
following tasks:
a) Prepares the payroll register
b) Enter this information into the employee payroll records
c) Prepares employee paychecks
d) the paychecks to the distribute paycheck function
e) Sends Files the time cards, personnel action form and copy of
the payroll register

5. Distribute Paycheck
 The company uses a paymaster to distribute paychecks to
employees in order to prevent payroll fraud.
6. Prepare Accounts Payable
 The AP clerk reviews the payroll register for correctness and
prepares copies of a cash disbursement voucher for the total
amount of the payroll. The clerk then submits the voucher and
payroll register to the prepare cash disbursement function. And a
copy is also sent to the update general ledger function.

7. Prepare cash disbursement function


 The cash disbursement function prepares a single check for the
entire amount of the payroll and deposits it in the payroll imprest
account. This account is where the employee paychecks are drawn
and is used only for payroll.
 The clerk send a copy of the payroll register, disbursement voucher
and the check to the AP department where they are filed.
 Finally, a journal voucher is prepared and sent to the update
general ledger function.

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